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The Rediff Business Special: N Sathiya Moorthy

Do not blame Nehru for India's economic woes

Guess, what India would have gained, and Indians got, if only capitalism had been ushered in at the turn of Independence, and market economy became the mantra of the mandarins in the North Block 50 years earlier?

Sure, we would have got our Coke and Pepsi that much earlier, and a whole generation of India women would have got their Charlie perfumes and Yardley talcum, not to mention Revlon cosmetics, and the Indianised versions of Cosmopolitan and Elle long before they had became grandmothers. And at least, Ford and Merc, if not Cielo and Hyundai, would have been on the Indian roads for 50 long years.

If liberalisation and globalisation had been the road to economic prosperity, there would have been prosperity, at least for some, but roads, mostly none.

If there are Marutis and Tata Sumos, computers and costly gizmos in India's backyard today, it is mostly because of the roads that have lead civilisation and modernisation to the vast interiors.

True, the agrarian economy did suffer, at least to an extent. But it was also the subsidised education that a volatile middle class got at the expense of the State that has resulted in a new rural society craving for a new social identity and also for goodies that it had only fondly felt -- with the eyes.

It may have become fashionable to blame Jawaharlal Nehru and his 'democratic socialism' for the current economic ills of the nation.

For an idealist leader, heading the nation out of political chaos and economic bankruptcy was only a small price to pay. That, too, he is paying it a full generation after his departure from the scene. And if you say that's how history judges him a generation away from his own time, Nehru has really become a historical figure.

Though Nehru 'chose the Soviet model of development', his message was as much capitalist as any others's. Like the American State, the Nehru government also focused greatly on agriculture and infrastructure industries, leaving the consumerist sector to private enterprise. If the latter did not thrive, it was also due to the absence of purchasing capacity and improved standards of living.

If the private enterprise was shackled in the name of a controls-and-permit raj, it was not because the state enjoyed it.

In a society driven by shortages, which in turn was a legacy of the immediate past, a community out to manipulate the market with a bottomline that grew thicker and thicker, has to pay its own price, if good governance has to have any meaning.

Rations, permits and controls were thus a fallout of the intransigence of the private enterprise to answer societal needs in a country blossoming out of the past economic shackles.

That way, at least, we better appreciated the economic content of the freedom movement, as much as its political inputs. Not many may care to know, and even fewer may care to remember, but the fact remains that it was the underlying economic criteria that rallied the Indian masses under Mahatma Gandhi's leadership.

The Champaran agitation of indigo farmers, the Ahmedabad Mill Workers's strike and the Kheda farmers's land revenue dispute all flowed from economic causes. Why, even charka and khadi, not to mention the new-found stress on other handicrafts and village industries were part of the process that gave meaning and content to the independence aspirations of the rural folks. Which is what ultimately won India its freedom.

That being the case, there was no escaping a social content in the economic policies of post-Independence India. The land reforms, when the Bhoodan movement failed, had to be enforced through law.

But for the tardy implementation of the co-operative farming concept initiated with much fanfare, even agriculture would have performed much better than it has actually done. Even the successful Green Revolution was the product of the very same political masters and their bureaucratic aides who are often being blamed for the failure on the industrial front.

Anyway, with a first five year plan outlay of Rs 26 billion, where would you have found enough funds for any active role by the private sector?

Be it the rural roads on which the Fords and Mercs ply, the software engineers and marketing managers that the IIMs have turned out, not to leave out the doctors and ancillary suppliers who dot the landscape with their success stories, you have to thank the system.

The roads having been laid, you have the automobile giants trekking their way to India. The software talent having been produced by the IITs and other engineering institutions at a low cost for the community and a very high cost for the society, the MNCs can poach around for qualified staff.

Thanks to liberalisation, however, with the education subsidies and the like being withdrawn, medicine and engineering education may cost a fortune for ambitious parents and their aspiring children. And the societal chasm that had been filled to a great extent over the decades, is being successfully widened.

The social cost of the widening gap, be it in terms of ambitious parents becoming increasingly corrupt if only to turn their children's dreams into realities, or a social strife involving the denied classes that had only been the other day brought up to the fringes of exposure and experience, is anybody's guess.

It is nobody's case that the government policies should not be reviewed or relaunched with a greater focus.

In fact, long before Nehurian planners got to sit around a table, and long before the 'Bombay Club' came to demand a 'level-playing field', it was the 'Bombay Planners' of Indian industrialists who offered a such an advantage to the public sector.

Only that G D Birla and J R D Tata, among others, did not know the financial potential of the Indian private enterprise, which the spokesman of liberalisation alone seem to have discovered with retrospective effect, now.

Liberalisation per se, as has been proved over the past six years, is not the exclusive cure for our economic ills. If you now say that the liberalisation process is being implemented as tardily as the socialist programmes were being implemented in the past, the blame lies in attitudes and approaches, not necessarily in the policies and the programmes.

That brings one to the Centre's blatant doublespeak. On the one hand it asks the state governments to remove octroi, if only to help reduce traffic bottlenecks. On the other hand it invites global investments for expressways, where the private enterprise is permitted to collect the very same octroi. If this is not doublespeak, what is?

It's easy to blame Nehru for his doctrine of democratic socialism. But in the same breath it should be said that it was only a centrist answer to a process set in motion, when Gandhi, literally, 're-discovered' the wheel almost a generation after it had been consigned to deadwood. This pushed the clock irrevocably backwards -- and with compelling political reasons, that make the society and the nation what they are. And from which there is no escape.

''To try develop a country through foreign capital is to barter the entire future for the petty gains of today.... The introduction of foreign capital for working out the natural resources of the country, instead of being a help, is, in fact, the greatest of hindrances to all real improvements in the economic conditions of the people. It is as much a political, as it is an economic danger. And the future of 'New India' absolutely depends upon an early and radical remedy for this two-edged evil.''

The observations are those of the nationalist leaders of India at the turn of the century. It was against the Britishers draining India of its raw material wealth -- now it would be against the MNCs.

The early nationalist leaders, too, had the message, not the methodology or the mission. Those things had to await the arrival of Mahatma Gandhi. But once he grasped the meaning and import of the swadeshi, and gave space and face to the same, a socio-political revolution could not be wished away. The result is for everyone to see. Is anyone out there listening?